MercoPress. South Atlantic News Agency

Cristina Fernandez and “The elixir of populism”, by Brazil’s leading magazine

Argentina has ceased to be a reliable partner and the ‘consequences will be terrible’ says Veja with a circulation of 1.2 million

As usual the Argentine people will suffer the most, victims of a “cheap nationalism” seduction inspired in the “Venezuela process”, says the latest edition of Veja, Brazil’s weekly magazine with the largest circulation, in an article dedicated to the seizure of YPF from Repsol.

Under the heading “The elixir of populism”, journalist Duda Texeira argues that President Cristina Fernández has become the “great apprentice of Chavist petro-populism”, in direct reference to the extravagant Venezuelan leader, Hugo Chavez.

In the hands of the Argentine state, “YPF will not have the capital to maintain much less increase the current production of oil” and will suffer a deficit similar or even greater to that of nationalized Aerolíneas Argentinas, plus “consolidating the international conviction that Argentina is not a reliable partner”.

“Oil is capable of generating the most demagogic, retrograde and nationalist instincts of any people and its rulers”, takes off the Veja piece which has a 1.2 million circulation, 90% subscriptions mostly from the Brazilian establishment.

The piece underlines the support from the ruling coalition, the opposition and 62% of public opinion to the YPF nationalization bill which is expected to be passed by the Senate early Thursday.

Nevertheless “the economic impact will be terrible. With foreign investors fleeing from Argentina and the government accounts in red, YPF won’t have the capital to maintain, much less increase petroleum production”.

Lack of energy supplies and inflation will harm the pockets of all Argentines in an authentic “Venezuelanization” process of the neighbouring country, underlines Texeira.

However the article makes no mention to the poor management of Spain’s Repsol of YPF, which was the main reason alleged by President Cristina Fernandez to announce the seizure process.

As to the investments of YPF under Repsol control that never materialized, the article says that “YPF did not risk because there was no guarantee of recovery”. This happens because in Argentina oil and gas have fixed prices which annuls or considerably reduces the chances of profit. Besides that, all the money spent and profits if and when, can “be abruptly confiscated by the government”.

The article recalls the recent complaint presented by a group of forty countries, among which the US, EU, Japan and Mexico, before the World Trade Organization, WTO warning on the trade restrictions imposed by the government of President Cristina Fernandez.

“The Argentine government tries to hide escalating inflation problems manipulating indexes and censoring journalists and economic consultants”.

Likewise the article targets the Kirchnerite grouping La Campora, described as “the men chosen to perpetuate the legacy of Cristina Kirchner” and which are expected to continue with the “Venezuelanization” of Argentina.

Among the figures of this rising star, Texeira mentions the son of Cristina, Maximo and the economist Axel Kicillof who last week was the presenter and defender of the initiative to nationalize YPF before the Senate, and now holds a post as one of the two auditors to manage the company under government control.

For ‘Veja’, YPF in the hands of the Argentine state will have a similar management to Aerolineas Argentinas, currently under the command of another man from La Campora, Mariano Recalde. “The operational deficit of Aerolineas is already above 700 million dollars (daily losses of approx two million dollars)” and warns that “this is a small example of what can be expected to happen with YPF”

“As always the Argentine people will suffer the most, for having let itself be seduced by cheap nationalism”, concludes Veja.